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Mobile phone transforming business in East Africa

o Louisa Kadzo
14.02.2011 kl 19:49 | CIO East Africa

The cover story in the February edition of CIO magazine gives an indepth analysis of just how businesses in East Africa have integrated the mobile device in their operations to improve efficiency, increase customer base and enable businesses have a competitive edge in the market.


The cover story in the February edition of CIO magazine gives an indepth analysis of just how businesses in East Africa have integrated the mobile device in their operations to improve efficiency, increase customer base and enable businesses have a competitive edge in the market.

In East Africa, the mobile phone is quickly replacing the laptops and modems in terms of enabling workforce mobility. The mobile phone is an affordable tool that has a wide reach, and we now have a wide variety of low end smartphones that are equipped with apps that enable the phone to be more than a tool for making calls and checking office emails.

Setting the groundsIn Kenya, the move by the Communication Commission of Kenya (CCK) in 2010 to lower 3G license fee and lower calling rates was a benchmark towards achieving enterprise mobility. License fee was lowered by 60% from $25 million to $10 million while interconnection rates from Kshs 4.42 to Kshs 2.21. This saw Bharti Airtel and Telkom Orange acquire the license after Safaricom (already in 3G operation. Airtel and Telkom 3G to be rolled out this year). It also marked the beginning of an aggressive price war by these telecom giants.

The year ended on a high with the signing of the Mobile Number Portability in December by the four telecom giants (Safaricom, Telkom Orange, Yu and Airtel), enabling subscribers to retain their telephone numbers when switching service providers.

In January 2011 alone, we have seen Kenya Data Networks announce its explansion of the Strix's System -- Network Outdoor Wireless Systems, Indoor Wireless Systems and Edge Wireless System -- to 16 countries in Sub- Saharan Africa. Safaricom launched their Huawei IDEOS phone, a low cost smartphone with Android 2.2, HSDPA (High Speed Download Packet Access) up to 7.2 Mbps (megabits per second), mobile tethering and many other attractive features. In addition, Safaricom injected US$125m (Kshs 10 billion) to upgrade its network, introduced an MPesa booking for travel tickets and hotel bookings as well as PesaPal, a partnership with Cooperative Bank, Kenya Commercial Bank and CFC Stanbic Bank to pay fees to schools via MPesa.

In the region, Zantel (Zanzibar Telkom operator) relaunching ZPesa in April last year, to enable service utilities to be paid using the mobile phone. The African Business Review has this year published that 50% of the Tanzania population are now using the mobile phone. New report reveals widespread usage of mobiles is replacing traditional business structure.

In Rwanda, the Ministry of Health launched a mobile-based public health information system -- mHealth programme -- of supplying mobile phones to rural health workers, allowing them to report difficult cases and get health information via SMS. Examples of how businesses in the region are leveraging the mobile phone for business advantage is endless. I want to focus on specific industry's, showing in what ways they are using the mobile phone in their operations.

Industry sector analysisAn analysis of the top 100 East African companies that participated in the CIO 100 awards (November 2010) showed that only 11% of the companies had business mobility solution projects that were making use of mobile technology and solutions available today.

"Many businesses in our region were conservative about this new technology. Maybe because of the proliferation of the telcos, businesses people needed to see what was possible -- businesses were also not thinking beyond what was being provided by the telcos," says Kevin Kinyanjui, Kenya Airways Information Systems Director and CIO.

Telecommunication sector: as early as 2000, Virtual City, a local developer of mobile solutions in the area of supply chain, knowledge management and interactive solutions, has been a steady player in the business mobility cosystem and has been able to curve itself as the market leader in the development, customization and implementation of innovative mobility solutions.

Safaricom, a major player in this sector, launched its MPesa project in 2007 that was designed to integrate business process management and customer relationship management (CRM) technologies. Both companies have won international accreditation on innovation, reach and impact through their mobile innovations.

Financial sector: equity bank's MKesho Xpress phone solution launched in 2010 enables their registered agents to capture their customer's details and upload the information to a central server for account opening. Madison insurance, also in the financial sector, has allowed their members to pay for their premium policy and receive claims using M-Pesa and ZAP (Zain, now Airtel, mobile banking product). The product has an interactive SMS facility with notification engine and capacity for bulk payments. The company further has an interactive web service that allows webchat and reporting claims online.

Manufacturing sector: coca-cola began a mobile distributor initiative in 2009 where the sales agents are provided with a mobile phone with pre-installed applications that enables the placement of delivery orders, issue receipts, conduct market audits and so on. All information is consolidated in a central server and synchronized via General Packet Radio Services (GPRS) over Virtual Private Network (VPN). The project won the Nokia Growth Economy Venture challenge in 2010 and received a US$ 1 million grant. The project has resulted in the elimination of out of stock, avoidance of lost sales among other advantages.

Farmer's choice, another company in the manufacturing industry, have employed a mobile ERP system using Microsoft Business Dynamic (off the shelf) product, linked with a meat processing module and a mobile invoicing module using Safaricom. Since its inception, the product has increased efficiency, timeliness and support of customers.

Health sector: AAR health services introduced an SMS query system in 2008 that enables hospitals to query AAR servers to check member validity via the mobile phone. The process is so simple that it acts like checking balance on mobile phone. This innovation has reduced the number of false claims by hospitals and has shortened the time spent to query and verify a patients details.

"We have plans to make our sms query system interactive. Clients will be able to query the system and get response in real time," says Wilfred Rono, AAR Group IT General Manager.

Transport sector: Kenya Airways has empowered their sales force and senior executives to access information and make decisions while on the go using the internet, VPN and a variety of access devices that are within the reach of the user.

Education sector: the Uganda education sector is vibrant in the areas of integration of mobile technologies and solutions in their education system. Ugandan Management Institute has a mobile learning system where students with iPods and any mobile phone can access online information, a virtual learning environment and send queries via sms.

Kenyatta University's Smart Card Project started in 2010 is used by students and staff as an identification card for accessing the various services in the university like the library and computer labs. The card is loaded with money via MPesa as one of the payment channels. The university has seen a reduced level in the cases of fraud and limited unauthorized access to the university facilities among other benefits.

What does this mean for a CIO?Properly deployed, mobility provides measurable top-line benefits.

These companies show that indirect benefits of business mobility such as customer satisfaction, retention and an increase in new customers, improved efficiency, time saving and reduced error rate ranked amongst the highest. "The mobile phone has enabled us to have a wide reach. We have been able to reach hospitals that did not have the capacity to invest in infrastructure like computers," says Wilfred Rono, AAR Group IT general manager.

Direct benefits like cost versus benefit element and Return on Investment (ROI) to convince CIOs to increase mobility budgets amidst shrinking IT budgets is an element yet to be seen.

Also, there are unique management challenges CIOs are encountering as enterprises attempt to gain greater control over smartphones. On one hand, a growing reliance on those devices is creating serious headaches for CIOs.

The most critical challenges stem from the complexity of the mobility ecosystem, a network made up of mobile carriers, device manufacturers, ISVs, distributors and other entities that contribute to an enterprise mobility solution. Without an understanding of how to work with the different players in the mobility ecosystem, enterprises will be unable to negotiate optimal deals for mobile devices or deploy them with the applications, tools and accessories, and security required for business users.

As for the future of business mobility, Chris Sang, COO Virtual City believes that future trends will see a move towards personal mobility. "Personal mobility is an area we are moving towards. With cloud computing taking increased importance especially in mid-sized companies, we will see users being able to determine what kind of mobile device they want, with what solutions and for what costs. Then, mobile software developers like Virtual City will come up with a user specific product. This is a young area that is still developing."

Keywords: Telecommunication  Business Issues  
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